World Bank is an international organization which provides financing, advice, and research to developing nations for nourishing their economic advancement. The bank fights poverty by providing developmental assistance to middle- and low- income countries.
There are 17 goals which the world bank tries to achieve by 2030. The top two are mentioned in their mission statement. The first is to put an end to extreme poverty. This can be done by reducing the number of people living on less than $1.90 a day to below 3 percent of the world population. Along with this, the bank tries to increase overall prosperity by increasing income growth in the bottom 40 percent of every country in the globe.
The World Bank gives financial and technical assistance to countries. They work towards reducing poverty and improving economic development.
They provide low-interest loans, zero-interest credits, and grants. Debt borrowings and cash infusions support global education, healthcare, public administration, and development of private-sector.
Sponsoring development projects is one among the primary functions of the world bank.
Human Capital Project
Human capital project was introduced in 2017. Countries are urged to prioritize investments in education, healthcare, and social protections. This will help them realize the dream of a stronger economy full of healthy, thriving adults.
Human capital projects include affordable childcare and increasing women’s access to better employment opportunities.
The Human Capital Index was introduced in 2018 for analyzing a nation’s investments in its human capital, mainly in the health and education sector. The index helps in identifying what is lost from the lack of investments, prompting leaders to think of how to remedy these deficiencies.
National Immunization Support Project
The National Immunization Support Project for Pakistan was approved by the World Bank in April 2016. The project, which costs an estimated $377.41 million, aims to increase the equitable distribution of vaccines among infants.
Learning for the Future
The Learning for the Future Project aims at enhancing children’s readiness for school and improving the effectiveness of secondary instruction in specific Kyrgyz Republic communities. Hence, the project primarily focuses on increasing the equitable access of early childhood education and works towards improving the effectiveness of instruction in secondary education.
The World Bank or the World Bank Group is not exactly a bank. It is rather a group of five individual and cooperative institutional organizations.
The different sectors are namely:
- The International Bank of Reconstruction and Development (IBRD)
- The International Development Association (IDA)
- The International Finance Corporation (IFC)
- The Multilateral Investment Guarantee Agency (MIGA)
- International Centre for Settlement of Investment Disputes (ICSID)
The IBRD gives money to creditworthy low-income or middle income countries. Meanwhile IDA issues credits, or interest-free loans, to the poorest of nations. On the other hand, IFC gives funds and guidance to the private sector, allowing developing nations to stay on a growth trajectory. In the same manner, MIGA is responsible for providing investments to the poorest countries for helping them reduce poverty and improve the welfare of its citizens. The International Centre for Settlement of Investment Disputes (ICSID) is responsible for providing arbitration on international investment disputes.
For the fiscal year 2021, the World Bank had distributed $30,522.65 million in IBRD loans, $23,931.96 in interest-free loans/credits, and $12,048.95 million in grants across the globe.
As part of the Bretton Woods Agreement, the World Bank was set up in 1944. The agreement stressed on the need for the creation of the International Monetary Fund (IMF).
The World Bank and the IMF worked hand-in-hand for supporting European and Asian countries which needed financing to fund post-war reconstruction efforts.
Both the World Bank and IMF have their headquarters located in Washington, D.C. The World Bank has over 170 offices worldwide.
The World Bank does not function like traditional banks. Its counterpart, the IMF, is more like a credit fund. Both of them have their own distinct responsibilities, and continue to serve the global economy.
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Check your knowledge
Answer) International Bank of Reconstruction and Development.
Answer) Bretton Woods Agreement
Answer) Washington, D.C.